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Report To: Policy and Resources Committee – 11 June 2007

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Report To: Policy and Resources Committee – 11 June 2007 REPORT TO: POLICY AND RESOURCES COMMITTEE – 11 JUNE 2007 REPORT ON: HOUSING CAPITAL BUDGET 2007/08, 2008/09 and 2009/10 - REVISION REPORT BY: DIRECTOR OF HOUSING REPORT NO: 299-2007 1. RECOMMENDATIONS 1.1. Committee is asked to: a. Approve the Draft Housing Capital Budget for 2007/08, 2008/09 and 2009/10. b. Approve the action as detailed in paragraph 5. c. Instruct the City Architectural Services Officer and City Engineer, in conjunction with the Director of Housing, to invite offers for the projects included in these Capital and Planned Maintenance estimates, and to authorise the Director of Housing, City Architectural Services Officer and City Engineer to implement alternative methods of procurement with contractors where these are necessary to achieve the value for money that will be required to meet the Scottish Housing Quality Standard (including partnering arrangements with contractors, where appropriate). d. Authorise the Director of Housing to accept offers as detailed in paragraph 5.3. 2. FINANCIAL IMPLICATIONS 2.1. The Council is funding the Capital Programme through a combination of borrowing and capital receipts. The budget has been set at £16.1m, which reflects the rent policy outlined in the Council’s Standard Delivery Plan and loan charges necessary to finance the borrowing. Included in the budget are capital receipts of £8.230m. 2.1.1. The 2007/08 Housing Capital budget is based on: a. Borrowing of £5.770m. b. Capital receipts amounting to £2.942m from Council House Sales. c. Land receipts amounting to £5.288m. d. An allowance for slippage on capital and capital receipts of 15%. e. Housing Estate Regeneration Funding to demolish surplus stock of £2.25m. f. A total Capital Resource of £16.1m. g. In addition to this, resources of £4.176m from Planned Maintenance. 3. SUSTAINABILITY POLICY IMPLICATIONS a. Sustainability The report will assist in adopting sustainable practices in: • The design, construction and maintenance of Council buildings and infrastructure, and encourage others to adopt similar practices. nt/ncr/hiu/Report No 299-2007 Housing Capital Budget 2 Energy • Reduce the consumption of energy and fossil fuels in Council properties and activities to reduce CO2 emissions in response to wider climate change obligations. • Promote energy efficiency systems and explore innovative energy technologies that increase the proportion of energy from renewable sources. b. Strategic Environmental Assessment None. c. Anti-Poverty The report will assist in the Council's target of reducing fuel poverty in the City. 4. EQUAL OPPORTUNITIES IMPLICATIONS None. 5. MAIN TEXT 5.1. This report has been prepared and the estimates reconfigured, in line with the revised SHQS Standard Delivery Plan submitted to Housing Committee on 16 May 2005, and to Communities Scotland on 30th June 2006 and agreed by Communities Scotland in September 2006. All programmes are subject to SHQS criteria in order that Council houses in the core stock meet the standards by 2015. It is a criterion that milestones towards meeting the standard are reported to Communities Scotland with a major root and branch review, scheduled for 2008/09. A separate bid to the Housing Estate Regeneration Fund has been made for the cost of demolition of surplus stock, and an allocation of £3.4m has been received to assist with demolition costs in 2006/07 and 2007/08. Figures for 2007/08 include carry forward of expenditure from 2006/07. 5.2. In line with Standing Orders, most projects have addresses shown in the estimates. These addresses are usually shown as estate developments. The City Architectural Services Officer or City Engineer will prepare contract documents and will update the addresses by excluding sold houses and houses with an application to purchase, just prior to pricing. The project report will be approved by Housing Committee and will give final details of addresses. 5.3. The following programmes have no addresses as yet and will be dealt with in the following way: 5.3.1. Disabled Adaptations Committee is asked to authorise the Director of Housing to identify individual addresses and, in conjunction with the Head of Finance, to incur expenditure within the Estimates allowance. nt/ncr/hiu/Report No 299-2007 Housing Capital Budget 3 The Director of Housing in conjunction with the Head of Finance, will have delegated authority to accept offers up to £25,000 per house. Offers over £25,000 for disabled adaptations will be approved by Chief Officers, in conjunction with Elected Members, because of the urgency of meeting the need of individual disabled persons. 5.3.2. Surveys, Urgent Works, Pilot Projects, Urgent Roof Replacements Stock surveys are an essential part of assessing the condition of the housing stock and planning ahead. During the course of survey inspections, urgent works are identified, eg roofs. In order to reduce the administrative delays, Committee is asked to authorise expenditure on urgent works, eg roofs, up to amounts detailed in the estimates. Committee is asked to authorise the Director of Housing to instruct the City Architectural Services Officer and City Engineer on locations for surveys and pilot projects and previous deletions. The fees for such are included within the sums for each item. 5.4. Kitchens and Bathrooms To minimise disruption to tenants these projects will primarily be undertaken in conjunction with heating and rewire projects. To meet the target numbers outlined in the SHQS additional locations are required. These locations have been prioritised by age of stock, ie the oldest stock which will not benefit from heating and rewire will be prioritised for kitchen and bathroom upgrading. A revised assumption of 80% kitchen replacement is in place for 2007/08. This has increased from a 60% assumption in the previous capital estimates report and follows monitoring of requirements during 2006/07. The situation will continue to be monitored. 5.5. Home Energy Conservation Act (HECA) Committee is asked to note that £8.566m is being spent on installing central heating and other energy efficiency measures. This is in line with the Council’s commitment to improving energy efficiency in its stock. 5.6. Design and Install Contracts 5.7. During 2006/07 a very successful design and install contract was carried out on the heating/rewire/kitchen/bathroom contract at Fairbairn Street. This formed part of Capital Contract Services Working Group recommendations. The contractor at Fairbairn Street was McGill Electrical. It is proposed that at least one contract each financial year is delivered in this manner provided suitable contractors can be found. The success of this initiative will continue to be monitored. 6. PRUDENTIAL INDICATORS The Prudential Code requires the Head of Finance to prepare a set of indicators that demonstrate that the Housing Revenue Account's Capital Plan is affordable and prudent. These are shown in Appendix One to this report. nt/ncr/hiu/Report No 299-2007 Housing Capital Budget 4 The Indicators demonstrate that the Capital Plan 2007-2010 is indeed affordable and prudent. An explanation of the Prudential Indicators, as shown in Appendix One, is shown below. Level of Capital Expenditure: This indicator measures affordability and gives a basic control of the Council’s capital expenditure. Ratio of Financing Costs to Net Revenue Stream This indicator measures affordability. The measure includes both current and future commitments based on the Capital Plan and shows the revenue budget used to fund the financing costs of capital expenditure. Variations to the ratio implies that the proportion of loan charges has either increased or decreased in relation to the total funded from Housing Rents. Estimate of Incremental Impact of Council Investment Decisions on the Housing This is also a measure of affordability. It shows the relative impact of the capital programme on the Housing Rents. Treasury Management Indicators The Treasury Management Indicators for 2007-2010 were reported to Finance Committee on 12 March 2007. The indicators shown in Appendix One to this report have been updated to reflect expenditure included in the Housing HRA Capital Plan 2007-2010. 7. CONSULTATION The Chief Executive, Depute Chief Executive (Support Services), Head of Finance, all Chief Officers, the Dundee Federation of Tenants Associations and Dundee Association of Council House Owners have been consulted on the content of this report. 8. BACKGROUND PAPERS • Housing Investment Group – Achieving the Scottish Housing Quality Standard – Housing Committee 16 May 2005. ELAINE ZWIRLEIN DIRECTOR OF HOUSING JUNE 2007 nt/ncr/hiu/Report No 299-2007 Housing Capital Budget 5 DUNDEE CITY COUNCIL HOUSING HRA CAPITAL PLAN 2007-10 PROJECTED CAPITAL RESOURCES 2007-08 2008-09 2009-10 £'000 £'000 £'000 1. Capital Expenditure funded from Borrowing 5,770 8,512 5,636 2. Capital Receipts – Council House Sales 2,942 2,908 2,914 3. Capital Receipts – Land Sales 5,288 2,580 5,450 14,000 14,000 14,000 4. Slippage at 15% on SHQS expenditure only 2,100 - - TOTAL PROJECTED CAPITAL RESOURCES 16,100 14,000 14,000 PLANNED MAINTENANCE 4,176 4,887 5,097 RENEWAL AND REPAIRS FUND - - - Note: Council House Sales 2007-08 are 140 at £21,000. For 2008-09 and 2009-10 SHQS figures used. nt/ncr/hiu/Report No 299-2007 Housing Capital Budget HOUSING CAPITAL PLAN 2007 - 2010 APPENDIX ONE PRUDENTIAL INDICATOR 2005/06 2006/07 2007/08 2008/09 2009/10 (1) CAPITAL PLAN PRUDENTIAL INDICATORS £ £ £ £ £ actual actual estimate estimate estimate Capital Expenditure £'000 £'000 £'000 £'000 £'000
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